President Barack Obama and Congress appear to be getting closer to a deal to cut spending as a condition for raising the federal debt ceiling.
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“Annual federal spending has gone from $1.8 trillion to $3.7 trillion in 10 years. The problem is runaway spending. Raising the debt ceiling simply allows government spending to keep running away from fiscal reality.
“The federal government currently borrows more than 40 cents of every dollar it spends – $4 billion of borrowed money every day. The Obama administration projects total federal debt will grow to $26 trillion over the next decade. An agreement to cut somewhere between $1 trillion to $3 trillion from future deficits, as is being discussed, would leave $23 trillion to $25 trillion of debt.”
“The debt ceiling debate exemplifies the contemporary politics of fear. President Obama and congressional Democrats are paralyzed by fear that a cutback on government spending will further tank the economy, which it wouldn’t, and stymie their attempts to buy votes from the variety of special interests that make up their always-shaky coalition, which it would. The Republicans press ahead with half-measures out of fear of being blamed for every child that goes hungry and every granny who has to pay a few dollars for the world’s greatest health care.
“What the public clearly fears is Washington’s business as usual. Everybody knows the past few years’ gargantuan overspending is unsustainable and killing the economy. Real spending cuts are the only solution, but that would take courage, which only a few people in power have shown thus far.”
“The time for political theatrics on both sides is over. The president and the Democratic Party need to get serious about making the hard, specific choices on spending they’ve been coy about to date. Republicans need to admit that not every effort to close a tax loophole is an economy-killing tax increase and must realize that default or a debt downgrade would be a disaster for the world as well as their own party’s political fortunes.”
The Heartland Institute is a 27-year-old national nonprofit organization with offices in Chicago, Illinois; Washington, DC; Austin, Texas; Tallahassee, Florida; and Columbus, Ohio. Its mission is to discover, develop, and promote free-market solutions to social and economic problems. For more information, visit our Web site or call 312/377-4000.